Correlation Between Bank Bukopin and Langgeng Makmur
Can any of the company-specific risk be diversified away by investing in both Bank Bukopin and Langgeng Makmur at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Bukopin and Langgeng Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Bukopin Tbk and Langgeng Makmur Industri, you can compare the effects of market volatilities on Bank Bukopin and Langgeng Makmur and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Bukopin with a short position of Langgeng Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bukopin and Langgeng Makmur.
Diversification Opportunities for Bank Bukopin and Langgeng Makmur
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Langgeng is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bukopin Tbk and Langgeng Makmur Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Langgeng Makmur Industri and Bank Bukopin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Bukopin Tbk are associated (or correlated) with Langgeng Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Langgeng Makmur Industri has no effect on the direction of Bank Bukopin i.e., Bank Bukopin and Langgeng Makmur go up and down completely randomly.
Pair Corralation between Bank Bukopin and Langgeng Makmur
Assuming the 90 days trading horizon Bank Bukopin Tbk is expected to generate 0.29 times more return on investment than Langgeng Makmur. However, Bank Bukopin Tbk is 3.46 times less risky than Langgeng Makmur. It trades about -0.05 of its potential returns per unit of risk. Langgeng Makmur Industri is currently generating about -0.03 per unit of risk. If you would invest 5,400 in Bank Bukopin Tbk on December 1, 2024 and sell it today you would lose (300.00) from holding Bank Bukopin Tbk or give up 5.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Bukopin Tbk vs. Langgeng Makmur Industri
Performance |
Timeline |
Bank Bukopin Tbk |
Langgeng Makmur Industri |
Bank Bukopin and Langgeng Makmur Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Bukopin and Langgeng Makmur
The main advantage of trading using opposite Bank Bukopin and Langgeng Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bukopin position performs unexpectedly, Langgeng Makmur can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Langgeng Makmur will offset losses from the drop in Langgeng Makmur's long position.Bank Bukopin vs. Bank Danamon Indonesia | Bank Bukopin vs. Bank Cimb Niaga | Bank Bukopin vs. Bank Tabungan Negara | Bank Bukopin vs. Bank Jabar |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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